July 19, 2011

Netflix Price Hikes : What to Do?

You may have heard that Netflix recently raised the prices on some plans.    What they did was split the online streaming service into a separate item at $8 a month then split the DVD by mail services priced separately.    Unfortunately this change also came with price hikes up to 60%.

I'm sure many customers who are hit with that 60% hike will quit Netflix.   I'm also sure Netflix knows that is coming and made the change with the expectation they'd lose those customers.

Personally I've been on the 2 DVD plan which was about $15 a month.   If I wanted the same thing then I'd have to pay $20 a month.   Thats a 33% price hike.   This makes me examine if I want to continue using Netflix or what.

Netflix Alternatives

Video on Demand I figure done good alternative to Netflix would be renting videos using video on demand services.   Amazon, Youtube, Blockbuster and Vudu all offer video on demand over the internet.   Unfortunately I looked at the selection on these services and they just don't have enough movies for us.  I took a sample of the most recent movies and TV shows that we've watched via Netflix and only one of 5 movies was available to rent through VOD.    Also the rental prices are fairly high at $4-5 per movie.   This may be an OK option if you watch very few movies a month.

Blockbuster online   Blockbuster has a service very similar to Netflix.   I could get 2 DVDs at a time through them for about $17.   They also have video games in their selection which is something Netflix doesn't offer.   However they don't seem to have online streaming service.    If you want video games and don't need online streaming then Blockbuster may be an OK alternative.   However for just the DVD by mail portion the Netflix plan for 2 DVD's is now about $5 cheaper than Blockbusters 2 DVD plan.   Blockbuster may be a good option for some people but it won't be better than Netflix for our needs.

Redbox   At just $1 per movie this is certainly a frugal choice.    If the Redbox selection of DVDs meets your needs and you don't mind leaving the house to get and return the DVDs then Redbox may work out for you.   Personally Redbox doesn't have the selection of stuff that I want.

Library - Many public libraries have DVDs to check out for free.  Our library has DVDs.    However the selection and availability at the library leaves a lot wanting.

Changing your NetFlix plan

I don't see any options out there that would work better for us than Netflix.    I'm not really thrilled about paying $20 a month for the Netflix service that we've had.  

Review your account history in Netflix and add up all the DVDs you've gotten in the mail and the online steaming programs you've watched over the past 3-4 months.  Questions to ask :

Do you use Netflix enough as it is?     If you aren't watching at least a few DVDs per month then you are likely paying too much for Netflix to begin with.  
Do you watch streaming more or DVD's by mail more?    If you watch streaming a lot but hardly ever get DVDs by mail then maybe you should cut back your plan to just the online steaming.   Or vice versa if you watch DVDs by mail mostly but rarely watch online then you could switch to just the DVD by mail option.   This could actually end up saving you money.
Do you watch tons of online and DVD by mail?   If you watch a lot of both mail and online services then paying the extra price for it may be worth while.   Its hard to swallow a $5-6 price hike on a $10-15 service but if its worth $16-$20 for you then its worth it.

I evaluated our usage of Netflix myself.   I found that we used the streaming a lot less than the DVD by mail.   Actually we used streaming more but the items that I watched were really nothing I needed to watch and could easily go without.   The streaming added little real value and is not really worth the extra $8 per month cost.   On the other hand we did watch enough DVDs to justify the DVD by mail program.   I decided to downgrade from the old $15 two DVD + streaming option to the new $12 two DVD.  

Side Note :
Interestingly you can also order their Starz Play service separate as a stand alone product for $6.99 a month.   Thats actually kind of neat if you only want Starz online.   But for an extra buck you can get all their streaming services including Starz so I can't imagine why anyone would want to pay $7 for Starz and not pay an extra $1 for all the rest of the streaming.  

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